New Legislation 2019 Includes “Just Cause”

Summary of New Legislation, AB 1482, Presented by RHN

Rent Increases:

Cap of 5% + cost of living (CPI) or 10%, whichever is the lower of the gross rental rate, over the course of any 12-month period.

No more than 2 increments in any 12-month period.

Just Cause

  • At Fault

Nonpayment of rent

Violation of the lease after being issued a written notice to correct

Committing or permitting a nuisance

Committing waste

Upon termination of a lease (after Jan 1, 2020), and receipt of a written request from owner, tenant refuses to execute a written extension or renewal of the lease with similar provisions.

Assigning or subletting the premises in violation of the lease

Refusal to allow the owner to enter

Using the premises for an unlawful purpose

An employee, agent or licensee’s failure to vacate after their termination as an employee

After giving written notice to vacate that is accepted in writing by landlord but fails to deliver possession at the time specified in the written notice

  • No Fault

Intent to occupy the property by the owner, their spouse, domestic partner, children, grandchildren, parents or grandparents*

*For leases entered into on or after July 1, 2020, shall only apply if tenant agrees in writing to the termination to allow or owner or family member to occupy or there is a provision in the lease allowing the owner to terminate the lease for this reason

Withdrawal from the rental market:

An order issued by government agency or court relating to the habitability

An order issued by government agency or court to vacate the property

A local ordinance the necessitates the vacating of the property

It is determined by government agency or court that the tenant is at fault for the conditions triggering the order to vacate (Tenant not entitled to relocation fees)

Intent to demolish or substantially remodel the property

For No Fault Owner is required to do one of the following:

Shall notify tenant of their right to relocation assistance by:

Waiving rent for the final month

Make direct payment to tenant for an amount equal to one month rent. For this option, owner must pay with 15 calendar days of service of the notice

If tenant fails to vacate upon expiration of the notice to terminate, the relocation assistance shall be recoverable as damages in an action to recover possession

Owner’s failure to comply shall render the termination notice void

Not included are single-family and condos owned by private individuals

Duplexes where owner occupies one of the units as their principal place of residency

Housing that has been issued a certificate of occupancy within the previous 15 years

Not exempt are any of the following:

(i) A real estate investment trust, as defined in Section 856 of the Internal Revenue Code.

(ii) A corporation.

(iii) A limited liability company in which at least one member is a corporation 

Clause to be included in lease agreements after July 1, 2020

“This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation.”

An owner of residential real property subject to this section shall provide notice to the tenant as follows:

(1) For any tenancy commenced or renewed on or after July 1, 2020, as an addendum to the lease or rental agreement, or as a written notice signed by the tenant, with a copy provided to the tenant.

(2) For a tenancy existing prior to July 1, 2020, by written notice to the tenant no later than August 1, 2020, or as an addendum to the lease or rental agreement.

(3) The notification or lease provision shall be in no less than 12-point type, and shall include the following:

“California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information.”

(A) Residential real property subject to a local ordinance requiring just cause for termination of a residential tenancy adopted on or before September 1, 2019, in which case the local ordinance shall apply.

(B) Residential real property subject to a local ordinance requiring just cause for termination of a residential tenancy adopted or amended after September 1, 2019, that is more protective than this section, in which case the local ordinance shall apply.

The just-cause provisions will kick in after 12 months of the tenancy, however, if the renter takes a roommate within the first 24 months, the clock will reset. Just cause then will not apply until all renters in the unit have been in place for a full year or at least one tenant has continually occupied the unit for 24 months or more.

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Sandy Adams President, Co-Founder Rental Housing Network, Inc. Broker/Owner, Sandy Adams Properties Sandy Adams is President and Co-Founder of Rental Housing Network, Inc and Owner of Sandy Adams Properties. She started her real estate career in 1978. After obtaining her broker’s license in 1985, she began specializing in residential property management. Sandy has served on numerous boards and committees for NARPM (National Association of Residential Property Managers) and CAA (California Apartment Association), as well as serving two full terms on the San Jose Advisory Commission on Rents. She has also taught several landlord workshops for small investment groups and Realtors.

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